Boeing awarded $37.7M for F/A-18E/F aircraft sustainment and readiness, a sole-source contract

Contract Overview

Contract Amount: $37,705,107 ($37.7M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2025-06-24

End Date: 2026-08-17

Contract Duration: 419 days

Daily Burn Rate: $90.0K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: F/A-18E/F SAT & FRCSW SLM AIRCRAFT

Place of Performance

Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $37.7 million to THE BOEING COMPANY for work described as: F/A-18E/F SAT & FRCSW SLM AIRCRAFT Key points: 1. Contract focuses on sustainment and readiness for a critical naval aviation platform. 2. Sole-source award indicates limited market options or specific contractor capabilities. 3. Cost-plus incentive fee structure aims to align contractor performance with cost objectives. 4. Contract duration of 419 days suggests a medium-term sustainment effort. 5. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 6. This award represents a portion of the broader F/A-18E/F lifecycle sustainment spending.

Value Assessment

Rating: fair

Benchmarking the value of this specific delivery order is challenging without access to the parent IDIQ contract's terms and historical performance. However, the cost-plus incentive fee (CPIF) structure suggests an attempt to control costs while incentivizing performance. The total award amount of $37.7 million for sustainment and readiness over approximately 14 months should be evaluated against the operational tempo and maintenance requirements of the F/A-18E/F fleet. Without comparable sole-source sustainment contracts for similar complex aircraft, a definitive value-for-money assessment is difficult, but the CPIF mechanism offers some potential for cost savings if managed effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when a single contractor possesses unique capabilities, intellectual property, or is the only source capable of meeting the government's requirements. For complex defense platforms like the F/A-18E/F, the original equipment manufacturer often holds proprietary data and expertise essential for sustainment, leading to sole-source awards. The lack of competition means the government did not benefit from price discovery through a bidding process.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive pressure. The government relies on negotiation and oversight to ensure fair pricing in sole-source situations.

Public Impact

The U.S. Navy's F/A-18E/F Super Hornet fleet benefits from enhanced readiness and sustainment. This contract supports the operational capability of a key strike fighter aircraft. The services delivered are critical for maintaining the airworthiness and performance of the aircraft. The geographic impact is primarily on naval aviation bases where these aircraft are stationed and maintained. Workforce implications include sustainment engineers, technicians, and support personnel at Boeing facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing opportunities.
Cost-plus incentive fee contracts require robust government oversight to ensure cost control.
Dependence on a single contractor for critical sustainment can create long-term risks.
Potential for scope creep or cost overruns if not managed diligently.

Positive Signals

Focus on sustainment and readiness directly supports fleet operational availability.
Incentive fee structure can drive contractor performance and efficiency.
Boeing's established role as the OEM provides deep technical expertise.
Contract duration allows for planned sustainment activities.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex supply chains, and significant R&D investment. Aircraft manufacturing and sustainment are specialized segments within this sector. The F/A-18E/F Super Hornet is a key platform for naval aviation, and its sustainment is crucial for national security. Spending on aircraft sustainment typically represents a significant portion of defense budgets, often involving long-term contracts with original equipment manufacturers due to proprietary knowledge and specialized tooling. Comparable spending benchmarks would involve other major fleet aircraft sustainment programs, which often run into hundreds of millions or billions of dollars over their lifecycles.

Small Business Impact

This contract does not appear to have a specific small business set-aside component, as indicated by 'sb': false. However, as a large defense contractor, The Boeing Company is often required to meet small business subcontracting goals on its prime contracts. The extent to which small businesses will participate as subcontractors on this specific delivery order is not detailed here but is a common requirement in federal contracting to ensure small business participation in the defense industrial base.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. The cost-plus incentive fee (CPIF) structure necessitates close monitoring of costs, performance metrics, and earned value management to ensure the government receives the best value. Transparency is typically maintained through contract reporting requirements and program reviews. The Inspector General for the Department of Defense may conduct audits or investigations related to contract performance and financial management.

Related Government Programs

F/A-18E/F Super Hornet Program
Naval Aviation Readiness Programs
Aircraft Depot Maintenance Services
Defense Logistics Agency (DLA) Aviation Support
Air Systems Command Contracts

Risk Flags

Sole Source Award
Cost-Plus Contract Type
Potential for Cost Overruns
Limited Competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.7 million to THE BOEING COMPANY. F/A-18E/F SAT & FRCSW SLM AIRCRAFT

Who is the contractor on this award?

The obligated recipient is THE BOEING COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $37.7 million.

What is the period of performance?

Start: 2025-06-24. End: 2026-08-17.

What is The Boeing Company's track record with F/A-18E/F sustainment contracts?

The Boeing Company, as the original equipment manufacturer (OEM) for the F/A-18E/F Super Hornet, has a long-standing track record in its sustainment. Historically, Boeing has been responsible for major maintenance, repair, and overhaul (MRO) services, as well as providing spare parts and technical support for the Super Hornet fleet. While specific performance metrics for past sustainment contracts are often proprietary or found in internal government assessments, Boeing's continued role suggests a generally satisfactory performance in meeting the Navy's requirements. However, like many large defense sustainment programs, there may have been instances of cost variances or schedule adjustments that required management and negotiation between the contractor and the government.

How does the pricing structure (CPIF) compare to other sustainment contracts for similar aircraft?

Cost-Plus Incentive Fee (CPIF) contracts are common for complex sustainment programs where performance outcomes and cost targets can be defined but are subject to some uncertainty. Compared to fixed-price contracts, CPIF offers more flexibility for the government if unforeseen technical issues arise, while incentivizing the contractor to control costs and meet performance goals to earn higher profits. Other sustainment contracts for similar high-performance military aircraft, such as the F-35 or F-16, may utilize a mix of contract types, including CPIF, Cost Plus Fixed Fee (CPFF), or performance-based logistics (PBL) arrangements. The effectiveness of CPIF hinges on well-defined target costs, performance incentives, and robust government oversight to prevent cost overruns and ensure value.

What are the primary risks associated with this sole-source sustainment contract?

The primary risks associated with this sole-source sustainment contract include a lack of competitive pressure on pricing, potentially leading to higher costs for the government compared to a competed contract. There is also a risk of contractor 'lock-in,' where the government becomes heavily reliant on Boeing for critical support, making it difficult and costly to switch providers in the future. Furthermore, sole-source awards can sometimes lead to less innovation if the contractor faces no competitive threat. Effective risk mitigation requires strong government negotiation, rigorous contract management, performance monitoring, and potentially exploring options for future competition or alternative sustainment strategies.

How effective is the current sustainment strategy for the F/A-18E/F in ensuring fleet readiness?

The effectiveness of the current sustainment strategy for the F/A-18E/F is crucial for maintaining the U.S. Navy's air combat capability. This contract, focusing on sustainment and readiness, directly contributes to fleet availability. The Navy's overall readiness levels for the Super Hornet are influenced by numerous factors, including the pace of maintenance, availability of spare parts, effectiveness of depot-level repairs, and the contractor's performance. While specific readiness metrics are often classified, the continued operation and deployment of the F/A-18E/F fleet suggest that the sustainment strategy, supported by contracts like this one, is largely effective in meeting operational demands, though continuous assessment and potential adjustments are likely necessary to address evolving threats and fleet age.

What are historical spending patterns for F/A-18E/F sustainment, and how does this award fit?

Historical spending on F/A-18E/F sustainment has been substantial, reflecting the complexity and operational demands of this advanced naval fighter jet. Over the aircraft's lifecycle, billions of dollars are typically allocated for maintenance, repair, upgrades, and support services. This $37.7 million award represents a specific, time-bound delivery order under a broader sustainment framework, likely an IDIQ contract. It fits into the pattern of ongoing, necessary expenditures to maintain the fleet's operational readiness. Annual spending can fluctuate based on fleet size, operational tempo, and specific maintenance needs, but consistent, significant investment in sustainment is a long-term characteristic of such major defense platforms.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Address: 6200 JS MCDONNELL BLVD, SAINT LOUIS, MO, 63134

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $37,705,107

Exercised Options: $37,705,107

Current Obligation: $37,705,107

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0001918D0001

IDV Type: IDC

Timeline